Fact-Finding Missions to Baku-Tbilisi-Ceyhan oil pipeline

Between 2002 and 2005, The Corner House and its colleagues and partner groups conducted fact-finding missions every year to areas along the route of the Baku-Tbilisi-Ceyhan (BTC) oil pipeline in Azerbaijan, Georgia and Turkey. During these visits, information was gathered about communities' expectations and opinions about the pipeline project, its impacts, and the consultation and land expropriation process carried out by the BTC consortium, led by British oil multinational BP, building the pipeline.

The findings were written up in detailed reports (links and summaries below), which were subsequently submitted to various official bodies, such as the public and private financial institutions providing financial support to the pipeline, and corporate social responsibility monitors.

The Mission attempted to survey villages that would be affected by the Azerbaijan-Georgia-Turkey (AGT) pipelines project, which comprises two pipelines laid into the same 44-metre-wide corridor: the Baku-Tbilisi-Ceyhan oil pipeline (BTC) and the South Caucasus gas Pipeline (SCP). But as a result of almost constant official surveillance, it was cut short because of its limited ability to have any meaningful communication with affected communities. Indeed, many people would not freely express their concerns or full extent of criticism of the project. Despite this atmosphere, however, opposition to the AGT pipeline project was clearly evident.

The AGT pipelines would parallel the route of the Baku-Supsa pipeline; most of those affected generally described their experience with Baku-Supsa as negative and were sceptical about any benefits of the AGT project. "Expectations for jobs, social development, energy, road improvements, and environmental management were not met for Baku-Supsa and people see little purpose in repeating this experience." Centralised government and corporate control of the project and consultation meant that local and regional issues were ignored.

Corruption is a significant problem in Azerbaijan: oil funds meant for social and non-oil industry development are being used to fund more oil development. Allegations of human rights abuses and retribution for protesting against the government contribute to an environment in which open debate of the project is difficult.

In just the few locations visited by the Mission, distribution of information and availability of official documents was clearly inadequate and inconsistent. The questions and issues raised by project affected communities and NGOs indicate that project sponsors have not informed communities, coordinated with regional and local community leaders, nor adequately addressed concerns. "A history of corruption, human rights abuses and the misuse of oil funds raises further questions about the true benefits of this project."

The Mission surveyed villages that would be affected by the Azerbaijan-Georgia-Turkey (AGT) pipelines project, which comprises two pipelines laid into the same 44-metre-wide corridor: the Baku-Tbilisi-Ceyhan oil pipeline (BTC) and the South Caucasus gas Pipeline (SCP) (see above).

"Failure to adequately survey local sentiments and address concerns could create a situation of further instability in a country that has already suffered political, social, and economic upheaval" warned the Mission report. "The AGT project is clearly extremely sensitive regionally, nationally, and internationally."

Local attitudes toward the project differed significantly between the eastern section of the pipelines route, where communities have been negatively affected by the Baku-Supsa oil pipelines (built 1997 to 1999), and the central and western sections of the route, where communities have not yet experienced an international oil project.

In the Baku-Supsa region, people complained about damaged roads and broken water pipes. Promised jobs did not materialise; communities saw no benefit from community investment programmes and no change in their own access to energy, with most villages lacking any gas supply. As a result, villagers expressed clear scepticism toward the new AGT project.

In the central and western section of the proposed route, project affected people had received little detailed information from the government or project sponsors. Crucial documents such as the Host Government Agreements had not been made publicly accessible, generating conflicts between and within jurisdictions, and weakening project-affected communities' trust in officials' authority. Many affected people are not sure of the pipeline's route, while landowners and users have not been provided with clear information about compensation. Figures on expected employment opportunities are vague, feeding rumours and false expectations.

The companies' baseline survey of the Borjomi national park district was wholly inadequate. Project sponsors dismissed impacts of an oil pipeline operation to the tourist potential of Borjomi and to the spring water industry.

The BTC consortium stated that the project would comply with the World Bank's social and environmental standards, which require full consultation with affected communities and fair compensation for damage caused.

To assess major concerns over the pipeline's human rights, environmental and development implications, the Fact-Finding Mission conducted in-depth interviews with local community leaders, local officials, affected people and local NGOs in Turkey. It found that the pipeline project was in violation of a range of international standards relating to consultation and resettlement, and also raised concerns over potential conflicts between the legal agreements for the project and international human rights and environmental law.

Although many communities and groups had been consulted at some level under the BTC consortium's elaborate consultation procedures, there were still numerous inadequacies and failures in both the design and the implementation of the consultation procedures, violating four of the World Bank's safeguard policies on consultation. Procedures governing land expropriation and compensation that the BTC consortium claimed to be following were universally violated in the villages visited, and such violations appeared to be common along the entire pipeline route.

There was no evidence of a development plan negotiated with affected Kurdish or Çerkez minorities, as required under World Bank safeguard standards for ethnic minorities.

Under the Host Government Agreement, the Turkish government has effectively abolished its executive and legislative powers to protect Turkish citizens along the pipeline route from potential environmental damage and associated health and safety hazards.

Given the systemic and systematic human rights abuses the Mission found, its report called for a Moratorium on appraising, financing and building the BTC project until these were addressed.

The Mission found:

continuing violations of international standards on consultation, compensation and resettlement, and

clear-cut evidence of systemic flaws in the project, arising from the political context in which the pipeline was planned and would operate that could not be addressed by piecemeal policy changes.

These findings were notable in north-east Turkey, where there has been a marked rise in detentions, arbitrary arrests, surveillance and harassment by state and military officials. There is a pervasive atmosphere of repression and lack of freedom of speech in the region, which precludes dissent about the BTC project. The Mission found clear-cut evidence of political repression that was so systemic as to invalidate the consultation exercises undertaken by project developers. The Mission was itself detained by the Gendarmerie (Turkey's military police) on two occasions and, due to police harassment and intimidation, forced to abandon several planned visits to villages affected by the pipeline for fear of exposing local people to potential human rights abuses by the state security agencies.

Under the legal agreements reached between Turkey and the project developers, the security of the pipeline is the sole responsibility of the Turkish state, which has designated the responsibility to the Gendarmerie, whose record on human rights has been repeatedly criticised by the Council of Europe. There is a strong likelihood that the human rights situation in the region would be worsened by the introduction of the pipeline, particularly as a result of increased militarisation via the use of the Gendarmerie.

On compensation, the Mission heard repeated allegations of the BTC Consortium systematically paying well below market rates for land; imposing rather than negotiating prices; failing to compensate certain groups of landowners and users; not providing affected people with proper information about their rights; and failing to inform them of the many potential negative impacts of the project. All these failures were generating growing anger among affected people.

Given its finding, the FFM called for a Moratorium on appraising, financing and building the BTC project to prevent human rights violations.

The Mission noted numerous concerns about the implementation of the land compensation process in Azerbaijan and resettlement of affected people. As a result of the BTC project, the human rights situation in the country, particularly intimidation, has worsened.

The Azerbaijan member of the BTC Consortium is embroiled in corruption allegations, and local level extortion along the route has been reported.

The Mission saw no evidence that the BTC pipeline will have a positive development impact for the people living along the route, but did see many signs of negative impact.

Several environmental issues are unresolved including damage caused by the pipeline's route through the Gobustan culture-historical reserve, and by oil spills, land mines, and the lack of a National Oil Spill Response Plan for the country, as required by international lenders.

The most controversial issue in Georgia is the pipeline's route through the Borjomi region of the country, which will have negative environmental, social and economic impacts.

The pipeline route appears to violate Georgian environmental law; could pollute local water supplies; threatens the ecology of the Borjomi park system; and geohazard and landslide risks are inadequately addressed. Confidence is not high because of outstanding environmental concerns with the earlier Baku-Supsa pipeline. As a result, the pipeline may not comply with the conditions attached to the project's Environmental and Social Impact Assessment.

The pipeline's route through Borjomi could have devastating impacts on the mineral water industry, which is economically vital to Georgia, accounting for 10 per cent of the country's exports, and providing significant income for local residents. The pipeline also threatens the tourism industry.

There are already complaints about a lack of jobs associated with pipeline construction.

Local government officials, NGOs and community representatives all talked about extortion surrounding the land compensation process with "mafia types" demanding 10-20 per cent of the compensation paid to people whose lands are impacted by the pipeline. Moreover, many landowners have now been told they will permanently lose their access to land. Compensation for village and community land, primarily pasture, has not been settled and is prompting clashes.

In September 2004, an international Fact Finding Mission observed the trials of Ferhat Kaya, a shopkeeper at the forefront of a local campaign to highlight the social and environmental impacts of the BTC oil pipeline. He helped over 30 villagers adversely affected by the project take their cases to the European Court of Human Rights.

Mr. Kaya was arrested in May 2004 and was allegedly tortured while in police custody. He believes that his arrest and ill-treatment were directly connected to his human rights work regarding the BTC oil pipeline.

Previous Fact-Finding Mission reports have drawn attention to the pervasive climate of repression in the north-eastern region of Turkey and the constraints this has imposed on consultation on the BTC project and obtaining redress for abuses associated with land acquisition. Prior to his arrest, Mr Kaya received repeated threats, and the general public stopped going to his shop for fear that they may be harmed if they were seen there, reducing his trade by as much as 90 per cent. Mr Kaya's case reinforces these concerns and raises serious questions over the extent of the human rights due diligence undertaken by those international financial institutions that backed the project financially.

It is clear from what was observed by the trial observation mission and earlier fact-finding missions that, despite constitutional and legislative changes adopted in Turkey, there remain serious concerns regarding compliance with international human rights standards. The mission concluded that at least 14 international human rights standards appear to have been breached during the detention and subsequent trials of Ferhat Kaya.

Throughout much of its visit, this Mission was subject to police surveillance, which served to intimidate affected villagers and others. Their experience suggests that Turkey's human rights reforms have had little impact in the north-east region of the country.

The Mission was shocked by the extent to which the BTC project was being implemented in breach of agreed standards, particularly those relating to land acquisition, potentially violating project loan conditions, Turkish law and the European Convention on Human Rights. Land was simply being taken without any consultation or compensation, and affected villagers faced many difficulties in obtaining redress for damages.

The Mission noted that the failures it identified had been, for the most part, observed or predicted by previous Fact Finding Missions. "The reluctance of the project lenders to consider the wider human rights and political context in which the project is being implemented" and their failure to exercise sufficient adequate oversight "is a major cause of the project's continuing failure to meet international best practice." In future, it stated, the financial institutions must take full account of the political and human rights contexts in which projects will be implemented, including the implications of this context for adherence with required standards. International Financial Institutions should explicitly screen projects for their potential human rights impacts.

For the BTC pipeline, project lenders should come to terms immediately with the context in which the project is being implemented, and exercise much closer and more independent oversight, monitoring and scrutiny.

After one year of construction, the Mission witnessed minimal positive development impacts, but did see damage to road infrastructure and houses, and a loss of income in several areas. Outstanding issues relating to pipeline safety through the Borjomi region still remain.

The Georgian government suspended the project in July 2004 because of violations of environmental law. International Financial Institutions involved in the project have ignored the government's position on environmental and technical safety and pipeline security. There is no effective communication between the Georgian government and IFC, EBRD and BP.

There are ongoing concerns regarding pipeline welding and coating. The government believes BTC Co has failed to provide adequate information about welding and coating issues, having been notified only by NGOs and the media. IFC, EBRD and ECGD should commission an independent audit of the technical problems connected with pipe corrosion.

Local impacts such as employment, land compensation and community investment programmes are still the subject of dispute and concern. The lack of job opportunities for villagers has resulted in much disillusionment, while contradictions and uncertainties regarding land compensation seem frequent. The BTC grievance mechanism is ineffective and lacks credibility; some complaints are not investigated thoroughly and many villagers publicly doubt the mechanism's effectiveness, or even ignore it altogether.

BTC Co should closely follow its Resettlement Action Plan and land acquisition guidelines, especially monitoring the behaviour of its contractors, in order to compensate for land losses and to prevent lands being used without prior compensation. An independent committee on dispute resolution should be created to oversee the grievance mechanism. BTC Co should implement its stated commitment to pay court fees for people with unresolved grievances.

The Mission investigated serious concerns raised by affected peoples, experts and workers employed on the pipeline, NGOs and the project's own monitoring reports, particularly relating to land compensation and corruption.

This time, the FFM was not subject to any known police surveillance, government intervention or intimidation. But freedom of speech regarding the project was not widespread, and many reports made to the FFM remained anonymous or confidential.

The FFM is concerned at the extent to which the project is being implemented in breach of agreed standards, particularly those relating to land acquisition. The Mission heard several allegations of bribes being paid in order to receive land compensation or employment.

The Mission heard numerous cases of failure to compensate for ancillary damages caused by the project, such as damage to roads.

Many project employees who guard the pipeline work over 15 hours a day, 7 days a week, contrary to Azerbaijan's laws.

The Mission is concerned about the ability of the press and affected communities to criticise the project. Extreme caution should be exercised in taking official positions at face value.

The Mission notes that the failures it has identified were, for the most part, predicted by previous Fact Finding Missions. In many cases, these failures could have been better mitigated had the project lenders paid more attention. Their reluctance to consider the wider human rights and political context in which the project is being implemented is a major cause of its continuing failure to meet international best practice.

In future, the International Finance Corporation, the European Bank for Reconstruction and Development (EBRD) and export credit agencies should screen projects for their human rights impacts, taking full account of the context in which projects will be implemented.

The Mission recommends that project lenders take immediate steps to address the failures identified and urges the project developers to comply with the agreed, legally-binding project standards.

The fifth FFM to Turkey returned to several villages visited during earlier FFMs to examine progress on concerns previously raised by affected peoples, experts, pipeline workers, NGOs and the project's own monitoring reports over the planning, land acquisition and construction of the BTC pipeline. These concerns relate to human rights abuses, expropriation of land, failures and discrimination in community investment programmes and labour violations.

The FFM found that problems identified in earlier visits had still not been addressed or resolved. Freedom of speech remained restricted. Those criticising the pipeline risk harassment and repression. Landowners in Turkey received significantly lower levels of compensation than in those in Georgia and Azerbaijan, and disputes were ongoing. There was widespread misunderstanding over crop compensation. Additional damage caused by pipeline construction in all the villages visited had not been compensated for nor fully repaired.

Previous FFMs documented a range of concerns raised by affected peoples, experts, pipeline workers, NGOs and the project's own monitoring reports over the planning, land acquisition and construction of the BTC pipeline. These concerns relate to expropriation of land, failure to implement acceptable environmental standards, lack of consultation, uncompensated ancillary damage, unacceptable use of untested materials during construction and labour violations. They reveal a pattern of failure that reflect systemic problems in the planning and implementation of the project. This mission found that the concerns and problems identified by previous FFMs have still not been addressed or resolved.

Company officials threatened or blackmailed villagers to dissuade them from demonstrating against the project. There have been numerous failures in the land compensation process, including during classification, registration, land inventory, pipeline rerouting and widening of the corridor.

Villagers expressed dissatisfaction at how Community Investment Programme money was being spent, that promises to employ local people had not been kept. Commitments under the Environmental and Social Impact Assessment undertakings continue not to be enforced. All villages complained that damage caused during construction was neither compensated for nor repaired, leading to severe income and property losses. Communities received inadequate information on risks during construction.

The company and lenders grievance mechanisms have not provided adequate means to seek redress, compounded by BTC Co intransigence. The consortium, their subcontractors and the Georgian government repeatedly attempted to avoid responsibility by referring complainants to one another.